TCTA - Lesotho Highlands Development Authority

Unyielding commitment to
REJUVENATION REVIVAL RENAISSANCE TRANSFORMATION
23 June 2014
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DISCLAIMER:
All information contained in this presentation:
 is intended solely for information purposes;
 should not to be construed, under any circumstances, by implication or otherwise, as an
offer to enter into any contract with TCTA and/or any of their officers, directors, employees
and affiliates whatsoever in respect of any aspect named herein;
 should not, in any way, be construed as an express or implied promise, warranty or
guarantee or implication by TCTA together with their officers, directors, employees and
affiliates; and
 shall not lead to TCTA together with their officers, directors, employees and affiliates to
incur any liability for any damages, including, but limited to, direct, indirect, special, or
consequential damages arising out of, or resulting from, or any way connected to the use
of the information contained herein.
 Background to TCTA
 Role of TCTA in the water sector
 Ability to raise funding
 Debt under management
 Ability to deliver projects
 Project portfolio
 Phase II funding principles
Who is TCTA?
What do we do?
 Structure, arrange and manage the
 State-owned PFMA Schedule 2
entity, working with project
partners to fund and implement
bulk raw water infrastructure
projects as directed by the Minister
of Water and Sanitation
funding of bulk raw water infrastructure
projects
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 Established in 1986 to fund and
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Negotiate project agreements
Institutional arrangements
Structure and arrange funding
Debt management
Tariff determination
implement RSA portion of LHWP
 Implement bulk raw water resource
 Mandate expanded to undertake
liability management on LHWP
and fund & implement bulk raw
water infrastructure in RSA
 Report to the Minister of Water and
Sanitation and Parliament
infrastructure projects
 Financial advisory services
 Knowledge Management
 SIPs-3 &18 Coordination
National Raw Water Resource Infrastructure
DWA
TCTA
Water Boards
Distribution of water
Municipality
End User
Treat raw water to potable level
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 Established track record in delivering financings according to critical
timeframes
 Established presence in the capital markets
 Strong relationships with funders and investors – all recent financings have
been several times oversubscribed
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All local banks have funded TCTA projects
Attracted large financings from international development finance institutions
TCTA paper attracts strong demand from investors
 TCTA is a strong credit
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Strong government support through guarantees on debt
Investors and lenders often treat TCTA paper as proxy for government debt
Projects rated by Fitch at AA+(zaf) & F1+(zaf)
TCTA credit is well understood in the market and attracts significant interest
Water infrastructure financing seen as an attractive asset class accessible through
TCTA
 Flexible financing structures underpinned by strong access to liquidity
 Ability to source cost-effective funding
 Strong track record in delivering large projects
PROJECT
LHWP Phase I
R’ Million
18 888
BWP
1 213
VRESAP
3 791
KWSAP
1 083
MMTS-2 (under construction)
901
MCWAP-1 (under construction)
561
Art. 10 & 11 of the Treaty
 South Africa responsible for all costs incurred for the implementation of the
water delivery part of the project
 Obligation to raise money by way of loans etc.
Art. 13 of the Phase II Agreement
 Most cost-effective funding must be used
 Most favourable funding opportunities available to either (SA or Lesotho)
shall be explored and utilised
 Funding related to water delivery to SA subject to consent of SA
 Concessionary funding available to Lesotho (in excess of its own
requirements) may be made available to SA s.t. conditions
Year
2007 Cost estimate in R’m escalated to 2014
(Water Delivery Component)
2016/17
2 000
2017/18
1 200
2018/19
1 800
2019/20
2 000
2020/21
2 500
2021/22
1 200
2022/23
500
TOTAL
11 200
Stage
Sources of funds
Funding requirement
2012/13 – 2016/17
(Planning, design
and construction of
advance
infrastructure)
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Existing facilities under Phase I
Project cashflows
R2 000 million
2017/18 – 2022/23
(Construction of
main works)
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Existing facilities under Phase I
New debt issuance
R9 200 million
Discussion ….
TCTA
Project Finance & Treasury
Telephone: (012) 683 1200
Website: http://www.tcta.co.za

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